Market Turning Points

Precision timing
for all time frames through a multi-dimensional approach to
forecasting
using technical analysis: Cycles - Breadth - P&F and Fibonacci price projections
supplemented by Elliott Wave analysis

"By the Law of Periodical Repetition, everything which has
happened once must happen again, and again, and again -- and not capriciously,
but at regular periods, and each thing in its own period, not another's,
and each obeying its own law... The same Nature which delights in periodical
repetition in the sky is the Nature which orders the affairs of the earth.
Let us not underrate the value of that hint." ~ Mark Twain

Current Position of the Market

SPX Long-term trend: If the market strength persists, the long-term
trend may need to be re-evaluated.

SPX Intermediate trend: SPX intermediate P&F count to 2300 is still
possible before a reversal occurs.

Analysis of the short-term trend is done on a daily-basis with the
help of hourly charts. It is an important adjunct to the analysis of daily
and weekly charts which discuss longer market trends.

Daily
market analysis of the short term trend is reserved for subscribers. If you
would like to sign up for a FREE 4-week trial period of daily comments, please
let me know at anvi1962@cableone.net.

Uptrend on borrowed time

Market Overview

The rally of the past two days failed to lift the DJIA to 20,000 once again,
but it should get one more chance at reaching it next week. Beyond then, the
opportunity may be gone for a while. The reasons for a top to materialize in
this time frame remain the same: An SPX P&F projection, and cycles! A rally
to 2240-2300 has been the preferred count for the uptrend which started at
1810 ever since the index got past 1940, although some uncertainty that it
would get there did develop along the way. Now, even the most recent pattern
of re-accumulation seems to be re-confirming the 2300 target. Topping cycles
are also suggesting that the uptrend is living on borrowed time. If the SPX
reaches 2300 next week -- a move of nearly 30 points from where we ended the
week -- it would be inconceivable for the DJIA not to rise the remaining 115
points needed to reach 20,000.

If we are to make a high next week, the current cyclical configuration calls
for a decline into April-May. If this materializes, it would bring more than
just a minor correction. A .382 retracement of the entire uptrend from 1810
would amount to 180 points. But the current wave structure of the rally from
that level may be suggesting an alternate scenario of continued strength.
The next few weeks should clarify the market's intention.

Analysis

Daily chart

SPX has done little since its high of 2278 a month-ago. There was another
attempt at rallying which did make a new high of 2282, but it was pushed back
immediately. We are trying one more time to get past the resistance band which
extends from 2270 to 2286. The rally stalled on Friday, ahead of the three-day
weekend without losing much ground, and short-term cycles look favorable for
another push this week. After that, there does not appear to be much of an
incentive to continue the uptrend, especially if we rally to 2300 next week,
but in order to confirm a reversal, the index will need to drop below 2234.

In spite of the probability of making a new all-time high next week, the pattern
from 1810 could still be a wedge. In its favor are topping intermediate cycles
and a bottom count which would be filled at 2300.

As it stands, the oscillators already show negative divergence, and if they
retain it as SPX makes a new high, it will be additional evidence that a top
is in the making.

The rally of the past two days has pierced through most of the overhead resistance
before stopping at the old high of 2278 and backing off. It was extended on
a near-term basis and a little consolidation ahead of a three-day weekend is
understandable. It could even retrace down to 2269 without damaging its uptrend.
Beyond that could be problematic for the short-term. The higher it remains
above the minor trend line which connects the two lows, the better its chances
of making a new high next week and reaching the 2300 target.

If the index pulls back to 2269, it will generate a near-term sell in the
oscillators. Then a final high would be confirmed with negative divergence
in the daily as well as in the hourly oscillators.

There is a little more congestion showing in all the indices as the consolidation
continues. QQQ (top right) has pushed a little higher while the others are
essentially going sideways. The patterns vary slightly, but they all look like
preparation for moving a little higher to finish the advance from October.
What follows will determine the longer-term market position. The MACD patterns
are still the weakest in QQQ and NYA (bottom center.)

GDX has broken out of the downtrend which started in August. The initial up-thrust
from the low is most likely coming to an end and the index should begin to
pull back down to about 20.50 -- and perhaps lower. This would form the base
from which we could determine the extent of the next uptrend.

Summary:

SPX looks ready to put in a top in the vicinity of 2300 and start a correction.
The extent of the initial retracement will be determined after we have evaluated
the amount of distribution which takes place at that level.

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The above comments and those made in the daily updates and the
Market Summary about the financial markets are based purely on what I consider
to be sound technical analysis principles. They represent my own opinion and
are not meant to be construed as trading or investment advice, but are offered
as an analytical point f view which might be of interest to those who follow
stock market cycles and technical analysis.

The above comments about the financial markets are based purely on what I
consider to be sound technical analysis principles uncompromised by fundamental
considerations. They represent my own opinion and are not meant to be construed
as trading or investment advice, but are offered as an analytical point of
view which might be of interest to those who follow stock market cycles and
technical analysis.